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263,000 Jobs Added In September, Unemployment Rate Slips To 3.5%; Biden Warns Of "Armageddon" Risk As Putin's Nuke Threats Grow; U.S. Officials Fear North Korea Preparing For 7th Nuclear Test; Oath Keeper Testifies Group's Leader Was In Touch With Secret Service In Late 2020; Biden Pardons All Federal Offenses Of Simple Marijuana Possession; Lawmakers Call On U.S. To Retaliate Following OPEC Plus's Production Cut. Aired 9-9:30a ET

Aired October 07, 2022 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[09:00:28]

POPPY HARLOW, CNN ANCHOR: Good morning, everyone. Glad you're with us. I'm Poppy Harlow. We are following several major stories here in the United States and around the world, all across the globe.

Let's get right to it this morning, the Labor Department here in the U.S. With the September jobs report, the U.S. economy added 263,000 jobs last month. The unemployment rate fell down to 3.5 percent. All of this as President Biden is set to give remarks in just a few hours on the state of the economy. He'll do that in Maryland.

Let's begin this hour with our Chief Business Correspondent, Christine Romans. What does this all mean not only for Americans and the job market, but for the Fed --

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Right.

HARLOW: -- and inflation.

ROMANS: There are different ways to look at this. So for Americans, it means the hiring continues. 263,000 jobs and it was pretty broad-based hiring. But when you look at the trend, Poppy, it is the slowest pace of hiring since about April 2021, it matches April 2021. So when you look at that nice bar chart, you can see slowing jobs growth, and that's exactly what the Fed is looking for.

It's been raising interest rates now for six months. And it actually takes about six months for monetary policy to affect these kinds of economic statistics. So, back in March, raise interest rates 25 basis points, and now this is where we are in September. But the jobless rate fell, back to near the 50-year low of 3.5 percent, that's near full employment.

And we've seen from other statistics, people who want a job have a couple of jobs to choose from really, you know, in this economy here. So 3.5 percent is still low across the board hiring. Leisure and hospitality, 83,000, healthcare, 60,000. Now you're back to pre- pandemic levels for health care jobs.

Professional business services, 46,000, and manufacturing another 22,000 there. We're talking more than 3.7 million jobs added so far this year. So these are kinds of all of the different statistics that are in the mix. Why is the market looking like it's going to be lower?

HARLOW: Yes, why?

ROMANS: Well, that's because it's still pretty strong. And the Fed will continue to raise interest rates aggressively until these things cool a little further. So the idea here is the Fed will continue to aggressively raise interest rates.

HARLOW: I mean, Larry Summers not only said this week, you know, he thinks it's more likely than not that we fall into a recession in the next 18 months. He also said he thinks like other economists have been saying, we need to see employment around -- unemployment around 6 percent to bring inflation back down to 2 percent. Is that increasingly looking like the reality?

ROMANS: Well, part of that though, is there's so many people who have left the labor market and the labor market was so messed up by the pandemic. When you start having people come back into the labor market, you could see the unemployment rate rise without big layoffs. And that would be kind of the sweet spot to see the unemployment rate rise for all the right reasons by getting more people in the job --

HARLOW: And that would publish the same thing?

ROMANS: And that could help, yes.

HARLOW: OK.

ROMANS: Yes.

HARLOW: I like that option better.

ROMANS: I'm an optimist, but I don't know.

HARLOW: Thank you, Christine Romans.

Next hour, we will be joined by the Labor Secretary Marty Walsh. We'll get the Biden administration's reaction to this jobs report and inflation. A chilling warning meantime overnight from President Biden on the growing nuclear saber rattling from Russian President Vladimir Putin.

CNN Correspondent Jeremy Diamond joins me this morning at the White House. Also Senior International Correspondent Fred Pleitgen is in Kyiv, Ukraine. Jeremy, let's just begin with you at the White House. This was at a fundraiser here in New York last night. And, you know, by all accounts, it took his own team, it took the White House by surprise with the President said.

JEREMY DIAMOND, CNN CORRESPONDENT: Yes, that's exactly right, Poppy. Several officials were surprised by the President's comments, learning of them, frankly, from the pool reports from reporters who were in the room to hear them. This was off camera, though, but reporters were in the room to hear the President's comments.

And why were they surprised mainly because this striking and stark warning that we heard from the President's essentially saying that the world faces the highest prospect of nuclear war in 60 years since the Cuban missile crisis. U.S. officials say that that isn't based on any new U.S. intelligence. And they were also in some ways caught off guard by the kind of colorful rhetoric that the President use in very stark terms to describe it.

Now I want to read you a portion of what the President said. He said, "We have not faced the prospect of Armageddon since Kennedy and the Cuban missile crisis. I don't think there's any such thing as the ability to easily use a tactical nuclear weapon and not end up with Armageddon."

Now, there's no question that there is an elevated risk of the potential for Russia to use a nuclear weapon, particularly as its face a string of defeats. And so, while the President's comments perhaps were the starkest that we've heard from any U.S. officials today, they did reflect what is a growing concern inside the Biden administration among national security officials about the prospect of Vladimir Putin feeling cornered, facing a string of military defeats in Ukraine, and ultimately deciding to do that.

[09:05:18]

But U.S. officials stress that at this point, they have seen no evidence so far to indicate that Russia is changing its nuclear posture, certainly nothing that would cause the United States to change its nuclear posture as it relates to this. And U.S. officials also haven't concluded that President Putin has decided at this point to use a nuclear weapon in this conflict.

HARLOW: OK, thank you very much, Jeremy, for that. I mean, Fred, this has been a concern since the start of the war. What would Putin do, potentially, if he was losing, and his losses are mounting? Ukrainian President Zelenskyy says they've retaken Ukraine, has retaken more than 500 square kilometers of territory in the south Kherson region since the 1st of October. What is the Russian reaction outside of this saber rattling on nuclear weapons?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, I mean, first of all, you're absolutely right, Poppy. The Russia has certainly taken some pretty heavy losses. And I think one of the things that really surprises a lot of people and certainly us as we view all of these, is it's a large area in which the Ukrainians are able to make advances because it's not just the south of the country, like many people have predicted, but it's the east of the country, as well. And all of that is happening simultaneously. And all of those are big gains that the Ukrainians are making.

It was quite interesting because the Ukrainian Defense Minister, just a couple of minutes before we went to air here, he put out a video directly addressing Russian forces that are on Ukrainian soil and saying, I'm telling you that, look, you've been lied to by your leadership, your comrades are already dying here. The best thing for you to do is to give up your arms and surrender.

So right now, it really seems the Ukrainians feel very much bolstered. And at the same time, you do see that there is a good degree it seems of infighting on Moscow side. I think that's something that we really haven't seen to this extent before. You have, for instance, Ramzan Kadyrov who was a big supporter of Vladimir Putin absolutely ripping into Russia's military leadership, essentially saying that the military leadership needs to change. Ripping into the mobilization of some of the squalid conditions that some of these people who are being mobilized are in.

And then also, this is something that was really unheard of. Just a couple of weeks ago, there was a local official who was installed by the Kremlin. And the Kherson region, actually here in Ukraine, who essentially called on Russia's defense minister to kill himself if he had any honor. That's something that you definitely would not have heard from the Russian side over the past months since this conflict has been going on. So certainly, Russians feeling the heat.

I did speak, Poppy, to some Ukrainian officials and they also say they believe the risk of nuclear weapons being used by the Russian side are pretty high at the moment, at least as this conflict goes on.

HARLOW: Wow.

PLEITGEN: And if there are losses continue to mount.

HARLOW: The fact that they -- that is what they believe on the ground at this point is startling to say the least. Fred Pleitgen in Kyiv, thank you. Jeremy Diamond at the White House, we appreciate the reporting.

Meantime, tensions are running high this morning in the Korean peninsula as the United States and its allies are responding to North Korea's flurry of recent missile tests. The Biden administration officials there say they lack -- and this is key -- they really lack visibility into the North Korean regime. They lack hard intelligence in what Kim Jong-un's intentions may be. But it is widely believed that he is on the verge of carrying out a 7th underground nuclear test.

Let's go to my colleague Katie Bo Lillis who has more. Katie, I was reading your reporting across overnight about this. I mean, this is quite the predicament that the White House and U.S. intelligence acknowledged that they are in because there is so little that they can really see into what North Korea is planning.

KATIE BO LILLIS, CNN REPORTER: Poppy, that's exactly. So the United States has what's called strategic warning that North Korea is poised to launch this 7th nuclear test. They can see from satellite imagery that the testing site, that preparations at the testing site appear to have been completed. But what they're not likely to have is any more warning than that. They're not likely to get any kind of warning when Kim Jong-un decides to actually push the button. And the reason for this is exactly what you say. North Korea is what intelligence officials call a hard target. They just have really limited visibility into the Hermit Kingdom. They're pretty solid on what North Korea's actual military capabilities are, right?

Every time North Korea launches a ballistic missile, the United States learns something. They have technical platforms that are able to collect information about those launches and build conclusions based off of that. What they don't have is a great picture into Kim Jong- un's intentions and the decision making inside of his inner circle.

And part of the reason for this is that really -- there's really one guy making the decisions here. It's Kim Jong-un. It's very similar to the problem that the intelligence community has with Russia and Vladimir Putin. When you have one guy at the top, who's really the end all be all in decision making, that's a very, very small target. You got to get inside his head.

[09:10:02]

HARLOW: Very difficult thing to do. Katie Bo Lillis, thank you for the reporting.

Up next, we do have new details about contact between the founder of the Oath Keepers and members of the Secret Service. What we're learning from testimony in the group's seditious conspiracy trial.

Also, President Biden pardons all federal convictions for what is known as simple marijuana possession. What will this mean long term in terms of paving the way for real change. And later, a CNN exclusive. We take you behind an elite group of Russian mercenaries' key to Putin's war strategy, and now they are being forced to recruit prisoners as morale and firepower run low?

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HARLOW: Welcome back, CNN has learned that the Georgia prosecutor leading the investigation efforts into former President Trump and his allies to overturn the 2020 election is aiming to wrap up her work before the grand jury before -- or excuse me -- after the midterm election. Sources say indictments could be issued as early as December. We'll keep you posted on that.

[09:15:09]

Meantime court is back in session in Washington, D.C. this morning and the seditious conspiracy trial for five members of the far-right group, the Oath Keepers. A former North Carolina leader of the group testified Thursday that he believed that Stewart Rhodes, the founder of the Oath Keepers, was in touch with a Secret Service agent in the lead up to the 2020 presidential election.

Our Law Enforcement Correspondent Whitney Wild joins me again this morning on this. Whitney, you've been covering this trial very closely since the beginning. And I wonder how the Secret Service is responding to this accusation, if you will, at least this belief from this person that the leader of the Oath Keepers had been in touch with at least one Secret Service agent.

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, they're not outright denying that that conversation could have taken place. So let me back up and give a little bit of context about what this person alleged. His name is John Zimmerman. He was former leader of the North Carolina chapter of the Oath Keepers.

And he said that prior to a September 2020 rally in Fayetteville, North Carolina, this man who is on trial for seditious conspiracy, Stewart Rhodes, purported to be in touch with a Secret Service agent. And the context was, they were calling the Secret Service to find out what the security parameters were, and what weapons would possibly be allowed at a presidential rally. As you know, and as most people could probably guess, weapons are not allowed at a presidential rally. No firearms are ever allowed.

But what this man testified to was that there was this, quote unquote, quick reaction force that was outside the rally, and it was there that they did bring weapons beyond the secure location. Again, the Secret Service is not saying that this conversation -- that there's no way this conversation took place.

Here is their statement from last night. "We are aware that individuals from the Oath Keepers had contacted us in the past to make inquiries. It is not uncommon for various organizations to contact us concerning security restrictions and activities that are permissible in proximity to our protected sites."

But certainly, Poppy, it was a moment that raised a lot of eyebrows. We got in touch with the Secret Service right away, again, who issued this statement. Right now, Poppy, we're going into really I'd say a new phase of this trial, where we're starting to see these witnesses really pick up the first couple of days, who's really focused on this one FBI agent. Now we're seeing quite a few more witnesses, several of whom say that they are former Oath Keepers. Poppy?

HARLOW: Whitney Wild, thank you for being on top of all of it for us. We'll get back to you shortly.

President Biden fulfilling a campaign pledge just a month before the midterms. This comes announcing that he is pardoning all prior federal offenses of simple marijuana possession. This is a move that senior administration officials say would affect thousands of Americans. It would also be a first step, a major step towards decriminalizing the drug.

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JOE BIDEN, PRESIDENT OF THE UNITED STATES: Too many lives have been upended because of our failed approach to marijuana. It's time that we write these wrongs.

(END VIDEO CLIP) HARLOW: Let's discuss the legal implications of this big picture. Criminal Defense Attorney Joey Jackson joins me now. And Joey, just want to note for our viewers, you have defended clients facing similar charges on the state level, this is federal. But you have interesting perspective on this.

Look, you have administration officials saying -- and I should note that they're not currently any Americans serving prison time solely for simple federal marijuana charges. But the number that had been charged with this as a crime on the federal level between '92 and 2001 was north of 6,500 people. How significant is this move by the administration?

JOEY JACKSON, CNN LEGAL ANALYST: Yes, Poppy, I think it's very significant to the point of at the state level defending them. New York, of course, being one of about 20 states now that recognizes marijuana for recreational use and doesn't prosecute it. And as a prosecutor, I remember prosecuting these too. But even before New York remove that impediment, the manner in which it was handled was a lot different, meaning, you would be getting a marijuana ACD, adjournment in contemplation of dismissal.

Just stay out of trouble. You're good to go. That's important because remember what Biden also did, Poppy, was encouraged the states to follow suit, in addition to the 20 states approximately now that don't have or at least recognize recreational marijuana. We know that about five more are valid, right, as it relates to that.

But to your question, I think it's important because what happens is it's not only a matter of evaluating this, Poppy. I'm looking and saying, OK, well there's no one in jail now in federal jail for marijuana possession, but it's about the civil disabilities that a conviction causes. And when you pardon people, you remove those civil disabilities.

HARLOW: Right.

JACKSON: Perhaps now people will have the ability to get into professions where licensing would say you can't do this. Firearms is a big deal. You're eligible for that. So I think removing the barriers to civil disabilities is very important and this is a significant first step.

HARLOW: I think that is such an important point, especially when it comes to jobs and opportunity and social mobility in this country, right, and to have the ability to realize the American dream.

[09:20:04]

I want you to listen to what President Biden said addressing the racial disparities that have been so rampant when it comes to charging people with these offenses. Here was the President.

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BIDEN: Criminal records for marijuana possession have led to needless barriers to employment, to housing, educational opportunities. And that's before you address the racial disparities around who suffers the consequences. While white and black and brown people use marijuana in similar rates, black and brown people are arrested, prosecuted and convicted at disproportionately higher rates.

(END VIDEO CLIP)

HARLOW: And actually, the ACLU data show that between 2010 and 2018 --

JACKSON: Yes.

HARLOW: -- a black person was three times more likely than a white person in this country to be arrested for possession of marijuana. How much do you think this will -- what the President has done actually affect social mobility, ability to get better jobs?

JACKSON: Yes, I think in a very significant way. You know, you have to have laws and you have to have policies that are in keeping with the more race, the cultures, the attitudes and the values of the times. And in citing the -- what you did, the ACLU, American Civil Liberties Union study, it talks about that disproportionality.

Why is it that a person of color would be three times more likely to be arrested? And after an arrest, what happens then, Poppy, a prosecution and then a conviction. And when you get convicted for offenses, particularly felonies, it just removes you out of important opportunities.

We know that it's hard enough as it is, right, to get up word and mobile and to get jobs --

HARLOW: Yes.

JACKSON: -- and licenses and housing and education and all that without the stigma of a conviction. And so, I think what the President is doing now is significant. Now we'll see what Congress does in terms of actually passing laws to this effect.

HARLOW: Right.

JACKSON: And we also know that removing it from the schedule one violation, right, is an important first step too. So we'll see what happens moving forward, but this is really important.

HARLOW: Joey Jackson, thank you for helping us understand it a bit better. Have a good weekend.

JACKSON: Of course, you too, Poppy. Thanks.

HARLOW: Well as Biden administration is really left with few options and essentially scrambling after OPEC and its allies slashed oil output by 2 million barrels a day, one Democrat in Congress wants the President to get a lot tougher on Saudi Arabia. He'll join us. Up next, California Congressman Ro Khanna with what he wants the administration to do now.

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[09:27:13]

HARLOW: Well right now, OPEC's decision to slash oil production is prompting calls for the U.S. to crack down on the world's largest oil suppliers. The White House saying it's weighing all options as several lawmakers renew proposals to hold Saudi Arabia and the other OPEC nations accountable, potentially sue them for, quote unquote, price fixing. OPEX production cut is expected to push gas prices up in the United States after falling pretty steadily from that record high over the summer.

With me now is Democratic Congressman Ro Khanna of California. Congressman, thank you very much. And you said this week, quote, the Saudis need to be dealt with harshly. What should the Biden administration do? What's harsh?

REP. RO KHANNA (D-CA): Well, Poppy, we should ask them to reconsider their decision. Give them five days. And if not, we should suspend the weapons sales, we're -- providing them with the patriot missile. We should suspend the spare parts and airplane logistics that we provide them. And we should pass No PAC. The President can call on Congress to pass that which would allow for antitrust lawsuits against the Saudi oil producers for making 73 percent profit margins on these barrels of oil.

HARLOW: At this point, it does not appear that the White House is moving in any of those directions right now. Brian Deese, the National Economic Council Director said yesterday, I have no announcements about any of that today, when he was asked whether the Biden administration still believes Saudi Arabia deserves. for example, U.S. weaponry. Do you have confidence the administration is going to do any of the things you just laid out?

KHANNA: I'll tell you that people in Congress are itching and demanding that the administration should do something. I mean, you've seen that the price of the barrel of oil has gone up almost $90. This is going to hurt Americans in the pocketbook.

And the American people are wondering we do so much for Saudi Arabia. We're responsible for almost 70 percent of their imports in defense. How are they doing this to us during an energy crisis? And they're strengthening Putin. Because the reality is Putin doesn't have much margins on the barrel of oil, the Saudis do. They're doing this in part to help Putin in part to make money. It's wrong.

HARLOW: But what do you say to Americans, Congressmen, who look at this and they look at what's happening right now with OPEC, and they look at their gas prices that are going to go up once again. And they blame Democrats for consistently opposing more drilling of oil and more permitting in this country.

KHANNA: Poppy, I would just share the facts. Oil production is up under President Biden, it's almost 12 million barrels a day. It's not quite at 2019 levels where it was 4.3 million, but it's higher than 2020 or 2021. It's projected to be at record pace in 2023, even more than the 2019 highs. So, it's just not true that oil production is enough but we also need the oil from the global markets.